We only ‘predicted’ N700 petrol price increase – IPMAN

The Independent Petroleum Marketers Association of Nigeria (IPMAN) and Association of Distributors and Transporters of Petroleum Products (ADITOP) have dismissed reports that they planned to increase petroleum pump prince.

The IPMAN said, it only predicted the hike in petroleum price from the current price to N700 per litre based on market forces.
Speaking with journalists in Abuja on Saturday, the IPMAN President, Chinedu Okorokwo denied the reports indicating a hike in fuel prices from July 1, and described it “as mere speculation and should not be considered for anything.

According to him, fuel was driven by market forces and given the current high exchange rate, the pump price of Premium Motor Spirit (PMS), otherwise called petrol could increase, hence the prediction.

He cited example of where the Naira on Friday dropped against the dollar, exchanging at N769.25 at the investors and exporters window.

The Naira depreciated by 0.82 percent compared with N763 it exchanged for the dollar before the Eid-el-Kabir holiday that began on June 28.

Some oil marketers had predicted that petrol prices could rise above N700 per litre in the northern region and around N600 in Lagos once independent marketers start importing the products from July.

Their predictions were based on the current high exchange rate, crude price, and landing cost.
The trend caused tension and panic buying as queues of motorists sprung up at the onset of the weekend in some filling stations in the Federal Capital Territory (FCT).

The NNPCL retail outlets and others were still dispensing fuel between N540 and N542 per litre.

“The increase in pump price would only be caused by high dollar rate which could affect the importation of petroleum products”.
According to him, in the light of deregulation, the oil market is open for importers who wished to do business and would only be licensed by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

Also, ADITOP President, Lawan Dan-Zaki attributed the prediction to the high exchange rate being experienced at the moment, adding that importers would only sell according to what was obtained at the international market.

He urged Nigerians to exercise patience because due to the deregulation being experienced, the PMS price would continue to fluctuate because of the market forces till it stabilised.

Dan-Zaki said the NMDPRA had issued licenses to five companies for the importation of fuel.

“As of now, no cargo comes with a high price, marketers are just predicting. The importers are also very clever, they just want the government to intervene and consider them in giving lower price, exchange rate.

“As time goes on when the competition begins, the pump price of fuel will come down because it is only the market competition that will bring the price down.

He said due to the deregulation, the government must allow the market forces on demand and supply to determine the price.
Dan-Zaki said that though the government has allowed the marketers to import fuel by themselves, the exchange rate and the rate of Naira struggles for value against dollar affect the market.

“The former official exchange rate by the Central Bank of Nigeria (CBN) is not realistic any more.
“So if an importer is importing product, he has to buy at black-market rate and that will determine how much to be sold to marketers and other consumers.

“If he
imports at N700 per dollar, there is no way a marketer will buy at N700 and still sell at same price,” the ADITOP president said.
He urged the Federal Government to ensure that the local refineries, including Dangote’s resumed operations soon to end importation and guard against fuel price hike in the country.